07/25/2008 12:04:32 PM EST
Shareholders' Rights to Information under Russian Law
Russian lawmakers have made Russian corporate governance more transparent and investor-friendly, and Ms. Rusinova reviews the impressive progress made so far. She concludes, however, that the Russian corporate community still faces the need for dramatic improvements in a number of very important areas such as disclosure of ownership structure, clear rules for mergers and acquisitions, reorganizations, independence and effective practices.
Ms. Rusinova writes: A joint stock company is obliged to grant its shareholders access to all the documents listed in the Law on Joint Stock Companies (Law No. 208-FZ of 26 December 1995). First of all, these are the company’s articles of association, the decision establishing the company, internal documents regulating the organization structure of the company and its bodies, the annual financial report, minutes of general meetings of shareholders, the prospectus of share issues, etc. This list is not exhaustive, and can be expanded by the company’s articles of association, internal documents, and decisions of its general meetings of shareholders, of its board of directors, or by other executive bodies of the company.
Moreover, Article 52(4) of the Law lists the documents a shareholder must additionally be provided with before the general meeting of shareholders is convened. This list includes, along with the aforementioned documents, the information on candidates nominated for the board of directors, draft changes to the company’s charter, etc.
The Law also requires any open joint stock company to publish each year its annual financial reports and other information provided for in the Law. According to Article 92(1) of the Law, the publication of this information shall be made in “the mass media accessible to any shareholder of this company”. A company that has publicly offered its shares is obliged at least once to publish quarterly reports for general information and also to disclose information on significant developments (Law on Joint Stock Companies, Article 92(2); Law on Securities Market (Law No. 39-FZ of 22 April 1996), Articles 23 and 30).